Measuring the Environmental Benefits of Wind-Generated Electricity

Production subsidies for renewable energy, such as solar or wind
power, are rationalized by their environmental benefits. Subsidizing
these projects allows clean, renewable technologies to produce
electricity that otherwise would have been produced by dirtier,
fossil-fuel power plants. In this paper, I quantify the emissions
offset by wind power for a large electricity grid in Texas using the
randomness inherent in wind power availability. When accounting
for dynamics in the production process, the results indicate that only
for high estimates of the social costs of pollution does the value of
emissions offset by wind power exceed cost of renewable energy
subsidies.